At 8:30 on the evening before his address to Congress, President Carter huddled with his energy team in the White House Cabinet Room. Dressed in blue jeans and sipping ice water, Carter worried over each point in his message with Energy Aide James Schlesinger (TIME cover, April 4) and a handful of key staffers. Rosalynn stopped by to eye the text. "If I can understand it, everybody can," she explained later. "We changed a word here and there to be more easily understood." At 12:45 a.m., a weary President went off to work on the speech for another hour before going to bed. Schlesinger and his small staff retreated to their offices, where the staff worked all night putting the finishing touches on the address and the Administration's proposed legislation.
Despite the last-minute wording revisions and a few substantive changes (gasoline taxes will be rebated to consumers by reducing their income tax, not their Social Security tax as had been contemplated earlier), Carter's program remained true to the details that had already been reported (TIME cover, April 25) and previewed in his Monday night speech. In essence, the President hopes to arrest growing U.S. fuel demand through conservation, and to rely on plentiful coal and conventional nuclear energy to stretch out supplies of oil and natural gas until new forms of energy (solar, geothermal and thermonuclear fusion) become the nation's major power resources in the next century.
That is a commendable—indeed, indispensable—goal. But some of Carter's chosen methods are debatable. The program largely bypasses the supply and demand workings of a free economy. Instead, the presidential plan relies heavily on rewards and penalties, to be dealt out mainly through a complex scheme of taxes and rebates. "Voluntary compliance is not enough," said Carter. "The problem is too large and the time is too short." Major items:
GASOLINE. The Government would set consumption targets providing for a gradual rise in usage until 1980, then a decline after 1982. If U.S. motorists in any year from 1978 on burn as much as 1% more gasoline than the target, then the next year they will have to pay a federal tax of 5¢ per gal.; the tax could rise to a maximum of 50¢ by 1989. Any money raised by the tax—and it could eventually be as much as $60 billion a year —would be returned, said the White House, not just to drivers but in equal amounts "to every man, woman and child in America" through income tax credits and direct payments to people who do not owe taxes. The credits and payments would function as a kind of income redistribution device. Lower-income people, who usually do not drive as much as those in higher brackets, would pay less in gasoline taxes but receive the same rebates.
GAS GUZZLERS AND SIPPERS. Washington will penalize buyers of gas-thirsty cars and reward purchasers of fuel-efficient autos, through a complex formula of excise taxes and rebates keyed to gas mileage. For example, in 1978 a $449 tax would be slapped on autos achieving 12 m.p.g.; by 1985 the tax would rocket to $2,488. By contrast, in 1978 a buyer of a car getting 39 m.p.g. would receive a rebate of $473; by 1985 the rebate would rise slightly, to $493.